NASA has cleared SpaceX (News - Alert) to start making regular supply runs to the International Space Station, with the first launch penciled in for October 8, 2012. SpaceX has a $1.2 billion contract for up to 12 supply launches with downmass returns through the end of 2015.

In a press event at the Kennedy Space Center on August 23, NASA Administrator Charles Bolden formally announced that SpaceX had completed its Space Act Agreement under NASA’s Commercial Orbital Transportation Services (COTS) development and demonstration program. 

"We're working to open a new frontier for commercial opportunities in space and create job opportunities right here in Florida and across the United States," Bolden said. "And we’re working to in-source the work that is currently being done elsewhere and bring it right back here to the U.S. where it belongs." 

Successful completion of COTS – basically a full-up launch of a Dragon capsule to orbit, rendezvous and berthing with ISS, and reentry returning cargo – was necessary for SpaceX to start fulfilling its obligations under NASA’s Commercial Resupply Services (CRS) Program. SpaceX demonstrated its chops with its May mission to ISS, marking the first time a commercial spacecraft had successfully docked with ISS.

Under the initial CRS contract, SpaceX is to deliver up to 12 supply flights between 2011 and 2015. Each flight will carry up to 6,000 kilograms of cargo to the space station and return up to 3,000 kilograms of cargo back to Earth. The Dragon spacecraft has a pressured capsule that holds up to 10 cubic meters of payload and can also carry unpressured cargo in its “trunk”/service module for placement on the outside of the space station.

SpaceX doesn’t get paid until mission objectives are complete, in this case, delivery of cargo to ISS and return of experiments and surplus equipment by the company’s Dragon spacecraft. This is a far different model than the way NASA and other government agencies have previously conducted business, where the contractor gets paid regardless of the success or total failure of a launch.

Moving forward, the company needs to demonstrate two attributes to make both NASA and its commercial customers happy: on-time launch and reliability. SpaceX has had no major hardware problems under the COTS program, but the company had significant delays in meeting its initial launch schedule due to a variety of factors, including software development issues. The company’s Dragon/Falcon 9 combination has had two successful launches to date, but a launch failure over the course of the CRS program would affect the company’s timetable in developing a manned capsule and a crew delivery services to the space station.

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